Roadside Resiliency

It’s an occupational hazard I suppose, this compulsion I have to examine roadside infrastructure everywhere I go. Street lights, traffic signals and control cabinets, bus and rail stops… they all smell of underutilization, and there are a lot of them. Why not repurpose? Why not leverage that real estate like American Tower Corporation did when they ingeniously bought up strategically located real estate in the 90s, stood up towers and waited for cellular and broadband companies to pay them for placement? Instead of delivering connectivity, however, this roadside infrastructure could be delivering energy. What’s more, because this infrastructure resides along the low-voltage, secondary distribution end of the electricity grid – the edge as it were – energy delivered here offers unique benefits.

Resiliency is one such benefit. Grid resiliency is a fundamental tenet of the smart grid, and one whose import swells along the eastern seaboard, which is still reeling from Superstorm Sandy. In October of 2012 Sandy delivered a wallop that caused nearly $62 billion in carnage and 13 days without power, punctuating the fragility of our nation’s electrical system. The situation would have been different had roadside infrastructure been upgraded with solar generation and battery storage. Imagine an outdoor lighting microgrid, or a traffic intersection microgrid?

Wait a minute, what’s a microgrid? A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and that can operate in either grid-connected or “island” mode. Translating, that means an outdoor lighting microgrid is a lighting circuit with an Automatic Transfer Switch (ATS) at the head end interconnection point to the grid, with solar generation, battery storage and lighting loads all residing behind the switch on the same circuit. When properly sized for a particular location’s solar generation capability and then islanded, the solar plus battery microgrid can power the lighting system load indefinitely even though the broader electrical grid is down.

Outdoor Lighting Microgrid

In a similar fashion, a traffic intersection microgrid is a low-voltage circuit on the secondary distribution system that is fronted by an ATS and includes solar generation, battery storage and loads in the form of traffic signals, red light cameras, pedestrian crossing signals, overhead lights, etc. With the right amount of battery storage for the loads and available sunshine, this intersection can also remain functional until grid power returns. Together, outdoor lighting and traffic intersection microgrids would have allowed vehicles and pedestrians to safely get around for all 13 days of Superstorm Sandy’s grid calamity, had they been in place.

Traffic Signal Microgrid

How hard is it to repurpose an already standing outdoor lighting system or traffic intersection into a microgrid? Today, it’s not as hard as you might think, though it does require some unique experience, a healthy dose of ingenuity and an ecosystem of key partners. One of the technical innovations that have emerged recently to simplify such infrastructure reuse is the grid-tied AC battery storage device. Companies like STEM and CODA Energy play in this space, solving the problem of high demand charges in places like California. Being grid-tied AC devices, these battery systems can be added to an existing AC circuit where they will source or sink energy on the circuit using cloud-based predictive analytics. When reducing peak demand charges the algorithm lowers monthly energy bills by predicting energy usage patterns and then deploying stored energy at precise times to reduce peak loads.

When put to use in a roadside microgrid the predictive analytics would be different, but the concept is the same. Predicting energy usage patterns is easy for outdoor lighting since there is very little variance in the load characteristics across a set of luminaires. A traffic intersection may be a bit more challenging to the extent energy usage depends on traffic, but this level of prediction pales in comparison to a commercial energy customer’s load characteristics, so it is well within scope. A roadside microgrid, however, presents a different challenge on the energy releasing side. The goal is no longer reducing peak demand but instead, ensuring there is as much energy as possible to power the microgrid’s loads should the broader electrical grid go down.

By itself that goal is easy; continuously top off the battery storage and then anything else can be released through the interconnection point to the broader electrical grid. Unfortunately the situation is not that simple. These distributed generation and storage assets can be used to help manage the efficiency and utilization of the distribution system, which may be at cross purposes with keeping the microgrid loads on as long as possible. Happily, predictive analytics can help. Storms like Superstorm Sandy do not materialize instantaneously. They evolve. Incorporating meteorological data is already part of the predictive analytics. When mated with rooftop solar, these AC battery storage devices predict how much sunshine and therefore how much energy a system will generate in the hours and days to come. This same technique can be used with roadside microgrids to prioritize storage over distribution system management in the hours and days preceding a widespread weather event.

Because of my compulsion, when I hear and read about the “smart grid” I imagine roadside resiliency – underutilized roadside infrastructure transformed into microgrids that help distribution system operators manage their systems in their spare time but then step up to deliver safe locomotion during emergencies. Now isn’t that smart?

Duh, It’s DER!

What’s in a name? Sometimes, it’s everything. DER, or Distributed Energy Resources, is the name given to a collection of energy solutions defined by small scale renewable energy sources combined with advanced information and control technologies that can be aggregated to provide reliable energy necessary to meet regular demand. Examples include: renewable generation, energy storage, energy efficiency, demand response, electric vehicles and any combination thereof.

Today DER means rooftop solar, with a little bit of Electrical Vehicle (EV) charging sprinkled here and there. Both rooftop solar and EV charging occur behind-the-meter, on private residential or commercial property, beyond the influence of the Investor-Owned Utility (IOU). In fact much of the rooftop solar going in today is provided by third party leases from companies like Solar City and SunPower, who are in direct competition with IOUs. Competition for rooftop solar DER is fierce, making it challenging for IOUs to play a significant role, especially when hamstrung by existing business models involving fixed rates of return. The only viable way for IOUs to leverage this class of third party (and customer-owned for that matter) rooftop DER is through program incentives. With the right incentives, participating customers can be persuaded to source energy from rooftop arrays or sync energy into EV batteries at meaningful times to the IOU just like they do with energy efficiency programs targeting thermostats, but the impact is small and indirect and may conflict with the financial benefits of these third party systems.

What will DER mean tomorrow? California may be first to decide. California has mandated (AB-327/Rulemaking14-08-013) that their IOUs deliver Distribution Resource Plans (DRP) by July 1, 2015 that include high levels of DER. In addition SB-43 , also known as “Community Solar”, mandates solar for everyone, not just those folks with sufficient rooftop real estate and credit scores. Both of these aggressive California mandates share a common problem – siting.

If you believe the Distribution System Operator (DSO) model is where we are headed, then the answer to the siting problem for DER and Community Solar may be along the low-voltage secondary distribution system, before-the-meter, on existing infrastructure and easements so that DSOs can own and operate these resources. Imagine solar generation added to existing outdoor light poles and then at the head-end of the lighting circuit, energy storage and power regulation are sited, sharing a common easement, interconnection point and information/control solution. Voilà, Local-Area DER!

Local-Area DER

Such a Local-Area DER solution has many benefits including:

  • Small-scale capacity with power regulation
    • Solar generation plus battery storage
    • Dispatch-able and load shifting
    • Resolve existing power quality issues w/regulators
    • New high-quality capacity w/smart microinverters
  • Located “before-the-meter”
    • DSO owned, operated & controlled
    • Meets incremental demand with co-located supply, reducing transmission losses
    • Adds value to distribution “wires”
    • Low-voltage: 120/240/480V, single or three-phase
  • Utilizes existing infrastructure
    • Quick, easy and economical to implement
    • Reduce or eliminate land use and permitting issues
    • Build up balance and reliability across interconnections from the edge
  • Deployable in lock-step with behind-the-meter grid issues
    • Similar sizing to “behind-the-meter” DER
    • Co-located along the same “wires” with issues
    • Economically scaled as grid issues scale

In addition to these benefits, siting Local-Area DER along existing roadside infrastructure where low-voltage distribution “wires” reside is democratic. Everyone lives near roadways, whether renting an apartment or residing in a structure incapable of hosting a rooftop solar installation, so Local-Area DER delivers on the Community Solar promise of environmental justice too.

Local vs Wide-Area DER

Wide-Area DER, sited further up the distribution system hierarchy at the sub-transmission or primary distribution level, does not deliver the same degree of benefit. Real estate remains a challenge to procure. Even though the amount of land required is less than a full-scale gigawatt solar farm, acquisition, permitting, land use, environmental and legal issues still abound. Plus the energy must traverse the distribution system to get where it is needed most, which may necessitate some of the very same switch and wire upgrades DER is intended to avoid.

There are scale matching issues as you move up the hierarchy as well. The number of circuits that can be addressed with a single solution increases as you move up the hierarchy, but the ability to target some circuits out at the edge but not others requires additional investments in power routing solutions. System sizing up the distribution system hierarchy can also be challenging. How much generation, storage and power regulation is needed today across all the rapidly evolving circuits, and tomorrow, and the day after that? IOUs are very skilled at modeling circuits and predicting load, so this would not seem like a concern on the surface. However, these well-oiled processes cannot match the pace of unpredictable change unfolding behind the meter.

Instead, a single circuit with occasional bi-direction power flow, power factor and harmonic issues can be targeted with a single circuit-sized Local-Area DER solution leveraging land and infrastructure whose cost is already sunk. Comparable sizing combined with co-location before the meter along the same circuit resolves these issues quickly and economically and helps the DSOs maintain control over their system while meeting their ever present reliability expectations.

So, what’s in a name? If the name is DER and it is preceded by the adjective Local-Area, it could be everything.

Franken’home

I love architecture. I also love technology, so blending the two is a fantasy, or so I thought. Turns out my day job in highly distributed renewable energy forces me to rethink all of the systems in a home in the context of the latest efficiency, generation and storage technologies. Doing so is hard and turns my fantasy into some kind of Franken’home, stitched together from bits and pieces across several industries. Here’s what I mean.

First and foremost, my dream home is perched on a low-bank waterfront parcel on the Puget Sound near Seattle, Washington. If you have never meandered a salty sound beach, dodging star fish and geoducks and inhaling that pungent kelp-filled fragrance, you are missing out. But I digress…

Of course my dream home is efficient, adhering to the latest passive solar home design principles including a highly performant building envelope with carefully managed airflow, orientation that maximizes seasonal use of sunlight and a suitably sized thermal mass integrated into the home design as concrete flooring and walls. Combined these passive solar principles ensure my dream home barely sips energy.

Even so, today’s modern life filled with electronics comes at a price; the auxiliary energy load is high. Multiple computers, media equipment, appliances, electric car chargers and the like all require energy. Plus Seattle is not exactly bathed in sunshine all year long like the Southwest. To meet this load above and beyond the passive solar design, my dream home has rooftop solar, perhaps an 18 kilowatt installation. Leveraging the beachfront location, a 2 kilowatt micro-wind turbine takes advantage of the prevalent winds and helps to offset the load as well. Solar and wind variability necessitates storage, so my dream home also has a 30 kilowatt-hour, lithium-iron-phosphate battery storage system to smooth out this variability and accommodate the long winter nights at 48 degrees North latitude. Even with all this onsite generation and storage capacity, however, I still believe there will be long-term value in remaining connected to the electricity grid so my dream home includes a net meter with a connection to and relationship with my local electric utility.

USB Ports

Now that energy is covered, what’s next? Lighting. All lighting, indoor as well as outdoor and landscape lighting, leverages dimmable LED technology. Moreover, dedicated DC-only lighting circuits are built into my dream home and powered by the DC battery system. Doing so eliminates the incredible redundancy of converting natively DC lighting to AC every time it connects to power. The battery system is charged by solar and wind, which of course are both variable DC, and then on rare occasion by the AC connection to the electricity grid when renewable fuel falls short of demand or becomes more economical. In turn, the battery system serves to smooth out this variability, delivering consistent DC voltage for all lighting. This consistent DC voltage also gets used throughout my dream home to power DC accessories via Universal Serial Bus (USB) interfaces integrated everywhere. Imagine how convenient your kitchen island and counters, and even bathroom counters, become with traditional AC power receptacles plus USB ports for charging the myriad electronic devices now standardized on USB cables for power.

Cistern

While the greater Seattle area ranks low for solar irradiance, rainfall is abundant, so rain water is carefully managed. All water on the structure and surrounding flat-scapes is collected, filtered and stored in an underground cistern, along with gray water generated inside the home from lavatories, tubs, showers, etc. Gray water in the cistern is then recycled for use in flushing toilets and for landscape watering.

Radiant Heat

On to heating. Have you ever experienced in-floor radiant heat, also known as hydronic radiant floors? The experience warms the soul (or sole anyway.) Because your feet are warm, and heat rises, the experience is very satisfying. It can also be very efficient, especially when embedded in concrete floors serving as thermal mass and mated to the latest solar water heating technology. Sure, a pump is required to recirculate the high energy-density fluid through the hydronic tubing, but very little electricity is required to actually heat the fluid. Only when the concrete flooring cools below the comfort level does in-floor radiant heat even need to kick in, and then only when there’s insufficient sunshine does the fluid need to be heated with an auxiliary electric heat exchanger. So my dream home includes in-floor radiant heating with a solar heat exchanger and electric backup.

Daikin

What about cooling? The greater Seattle area is not known for its long stretches of 100+ degree days in the summer, but given the location of my dream home on the Puget Sound, taking in the view is paramount. View means glass, and glass means cooling load, especially when facing south or west. In-floor or in-ceiling radiant cooling is an elegant solution for all the same reasons in-floor radiant heating is. Unfortunately, radiant cooling is subject to condensation issues when relative humidity is high, which is the case in Seattle, so this solution will not work. Instead, careful attention is paid to passive solar design details like glass properties and thermal conduction between the poured concrete floor and the cool earth below, which dramatically reduces the cooling load overall. Then an efficient air-to-air heat exchanger like the one from Daikin is used for spot cooling where and when necessary.

Nest

My Franken’home is lying on the operating table all stitched together, an amalgamation of disparate yet highly efficient systems. It is not, however, alive. To make my dream home live, it’s not lightening I need but a control system, and this is the biggest gap in today’s available technologies. Nest, recently purchased by Google for a whopping $3.2 billion, helps show the way with its clever activity-based learning and optimization. My dream home takes this idea and extends it throughout all systems in order to give it life. Sensors abound. Each room or area in my dream home has its own hydronic radiant floor zone, lighting zone, window covering or shading zone, temperature sensors at ground level, torso level and ceiling level, occupancy sensors and lumen sensors for brightness. These sensors provide the real time feedback loop necessary to optimize the various systems over time. Plus each room or area has a manual control for temperature, lighting and shading. Then like Nest on steroids, over the course of a year’s worth of seasons, my dream home’s control system learns the relationships between season, time of day and activity – reinforced by manual adjustments to systems – and derives common default behaviors with the twin goals of hands-free comfort and energy efficiency most of the time. Overrides will occur all the time, and will remain easy, but with more and more time the activity trends will emerge that enable the system to be comfortable and energy efficient, automatically.

Energy efficiency in the context of occupant comfort has more to do with load management. The other dimension of efficiency in my dream home with onsite energy generation and storage plus a connection to the electricity grid involves economics. When should onsite energy generation be used directly by house loads, stored in the battery system or inverted through the utility’s meter onto the grid? The answer lies in the relative costs and benefits of the various options based on the time of use. Utility energy prices over time are one key input. For example, if energy is being generated when the utility will pay a premium, then this energy is inverted onto the grid while the house runs off the battery system. However, if historically the next day has a particularly high demand for lighting and USB device usage and there is insufficient time to fully top off the battery system overnight, then some of the renewable energy generation is used to charge the battery system instead.

Meter and CT

Like the temperature, lumen and occupancy sensors used to optimize the energy loads of comfort systems, optimizing energy economics needs sensors too. These sensors are called meters, with current transformers (CT), and they measure energy, power, current, voltage and a host of more esoteric power parameters. My dream home includes granular energy monitoring. Each of the comfort systems – heating, cooling, lighting and shading – has its own meter and CT for individual monitoring. The heating system utilizes a pump and backup electric heat exchanger so each of these sub-systems is individually monitored with its own meter and CT. All major appliances are individually monitored too – refrigerator, oven, induction cooktop, microwave, dishwasher, clothes washer and dryer, media equipment and EV car charger. All DC USB accessory circuits are monitored together with a single meter and CT, as are the conventional AC power receptacle circuits, so individual accessories won’t be identifiable but accessory energy usage as a whole will be. Energy generation systems are also individually monitored. Together, all this monitoring information gets used to learn and optimize the economic performance of my dream home over time.

This level of whole-house system integration centered on simplicity for the home owner does not exist today, which seems shocking. It is such an obvious problem and all the bits and pieces exist separately, yet the path to integration redemption is littered with carcasses of startups and mature multinationals that have tried and failed. The market for whole-house system integration and automation is fragmented, as are standards. Plus the sales channels are wide and varied, a testament to the many ways such systems come to be in a house. This is a tough business challenge, but one that I hope will come along for the ride as energy efficiency, generation and storage innovations needing integration and automation flourish in the coming years.

One additional gap in today’s technology keeps my stitched-together Franken’home from getting off the operating table and really living: fire. I love fire. The ambiance and warmth it provides as an aesthetic design feature inside and outside is difficult to beat. More importantly, I love to grill. My dream home has an outdoor kitchen worthy of a Food Network television show, though it is covered. We are talking the Seattle area after all. Yet fire needs fuel, and fire fuel is neither renewable nor green. It’s a conundrum. On second thought, it’s not so much a technology gap as a personal problem. I am too unevolved to live without fire, but may be exactly unevolved enough to work for Geico Insurance.

The Breakup Letter

T-Mobile is running a clever little ad campaign urging mobile phone customers to send their controlling carriers a breakup letter. It’s all about early termination fees, which keep customers tethered to their current carrier for the duration of their contract. These fees help carriers recoup the cost of subsidizing the mobile phone hardware – for example, a $499 smartphone can be had for free with a 2-year contract. If the customer wishes to leave before the carrier can earn out their $499 plus a tidy margin, the carrier recovers the unpaid balance via early termination fees.

I wonder whether energy customers would like to send their controlling utility companies a breakup letter too. Residential customers in Hawaii and commercial customers paying demand charges in California probably like the idea quite well. Their electric utilities, asleep at the wheel while innovations in energy efficiency, generation and storage reduce demand for their product, have been levying early termination fees of a different sort. Imagine hundreds of millions of dollars tied up in a centralized, coal-fired power plant. Ten years ago the plan was to earn out this whopping upfront investment – plus a reasonable return – over the next 30 years from $$/kWh paid by a captive audience of energy customers. Trouble is, the audience is no longer captive. Energy customers are being more efficient. They are buying or leasing rooftop solar and in some places, going completely off grid. As demand for the utility’s product wanes, meeting this 30-year obligation requires these electric utilities to increase their energy prices in order to keep the shortfall at bay. Increasing energy prices, in turn, further decreases demand and perpetuates the cycle. Energy customers unwilling or unable to employ efficiency, generation or storage innovations are left behind to pay these higher energy prices – akin to early termination fees.

Dramatically, the Rocky Mountain Institute just published data crisply answering the question of when it will become economically viable to defect from the energy grid entirely using solar photovoltaic (PV) panels plus lithium ion battery technology. The answer is an unequivocal “now” in places like Hawaii and within the next 10 years more broadly. More and more utility customers will be terminating early, well ahead of when the electric utility will recoup its earlier investments in centralized energy generation.

BroadbandTrends

As a result, customers are breaking up with their wireless carriers and their electric utilities with more breakups on the way. How do you connect to the Internet at home – digital subscriber line (DSL), cable modem, fiber, wireless, satellite, broadband over powerline (BPL)? According to the Organization for Economic Cooperation and Development (OECD) nearly 70% of all U.S. households have broadband connectivity and the mix of technologies used lays out like this:

BroadbandTable

Penetration of broadband internet access has fundamentally shifted the way media content gets consumed. Most of Gen Y – raised on the Internet – consumes their media content via the web. Armed with their Netflix, Hulu Plus and other Internet-based content subscriptions and the control they provide over what, when and where, Gen Y is shunning traditional television content from the Comcasts and DirectTVs of the world. The only gap in this strategy is live sports content. Often this gap gets closed at bars where the social dynamic of enjoying live sports with friends and food service trumps the convenience of home. Plus, more and more live sporting events can be watched in real time on the Internet via applications like ESPN’s WatchESPN family of device-specific, content-streaming applications for homebodies.

NewsPlatform

Broadband equals streaming, and broader band is better. Innovations yielding faster and faster connection speeds are driving the penetration of fiber throughout major metropolitan areas. Fiber is even winning in rural Greenfield developments that put the “ease” in easement, helping to keep the cost per foot of delivering fiber lower than fiber in urban areas rife with right-of-way issues. Before long, fiber companies will own the connection to the home, like electrical utilities, and yet this connection will be under siege soon as well.

NextGenNetwork

Ever wonder why there are two different wireless networks; why your smartphone shows bars of connectivity to your cellular network while also providing Wi-Fi access to your local home, hotspot or work network? By any chance do you have Voice Over Internet Protocol (VOIP) phones at the office, or even at home via providers like Vonage? A massive shift is afoot, fueled by innovation. Convergence is coming. With the rollout of fourth-generation / long term evolution (4G/LTE) technologies in the cellular networking world comes the acceptance of data, not voice, as the dominant packet being marshalled around. Data means packet switching using the Internet Protocol (IP). Voice is not left out entirely; it too can obviously be marshalled around using IP, so all networks are converging on a single, flat, IP-based technology. Speeds are increasing as well. A third-generation carrier network (3G) can deliver speeds of 1.5 to 3 megabits per second (Mbps) while a 4G/LTE network can deliver 10 to 20 Mbps, today. These speeds are already as good as or better than DSL. Plus the theoretical limits for 4G/LTE approach 100 Mbps down and 50 Mbps up, landing in the realm of fiber solutions. Work is already beginning on the fifth-generation cellular network (5G), with the goal of achieving a flat, all IP-based network and theoretical speeds in the 1 gigabit per second (Gbps) range.

Prognostications

Another breakup letter is in the works. This letter severs ties with Internet Service Providers (ISP) providing underground connectivity (i.e., DSL, cable, fiber) and, ironically, puts mobile carriers front and center once more, but not necessarily the same mobile carriers we know and love today. Coming full circle back to mobile telecommunications purveyors is not the most interesting realization, however. Imagine a world where you do not need to be tied to an electric utility for power or an ISP for connectivity. No ties mean freedom. Sure, you could plop your super energy efficient house with Gbps connectivity anywhere there is sufficient sunshine, wind or both, and a wireless broadband access point. But that is the least interesting ramification, enmeshed as it is in the larger socioeconomic ebbs and flows of urban versus rural renewal. Even more mind-bending are the truly mobile notions. All-electric vehicles covered in flexible solar collecting skins and sporting Gbps connectivity would rarely need to dock, would provide passengers and surrounding vicinity full fidelity access to the Internet, could participate in a bevy of two-way, data-intensive telemetry services and be commonplace. Mobile telemedicine clinics would deliver Western-style medical services to remote, impoverished areas of the world, economically. Beach umbrellas made from foldable solar-collecting fabric, a handle filled with batteries, a Wi-Fi hotspot and a 120V AC receptacle would dot sandy shores everywhere.

As the inspirational music fades, keep the breakup letter in mind. If you are not penning a letter to Verizon Wireless or Duke Energy or Comcast you may find yourself paying too much and labeled a Luddite. After all, innovation changes everything.

Ocean or Archipelago

DeLoreans are rare, especially ones with the flux capacitor option. But if we happened on a pristine example, set the date to 2044 and mashed the pedal, what would we see upon our arrival? Would the energy landscape resemble an ocean where energy consumers and producers are in constant contact, fluidly exchanging energy to capitalize on small differences in price, or would it resemble an archipelago where everyone produces their own energy locally like an island? And what’s so special about 2044?

Bell System

Well, it has been 30 years since the consent decree broke up the Bell Operating Companies that had previously provided local telephone service over copper land-lines in the United States. At the end of 2012, fully half of American households had no land-line telephone service whatsoever, relying 100% on wireless carriers for their real time interpersonal communications. That is a remarkable transformation by any measure, and verifies 30 years as plenty of time for a sweeping sea change. Plus, 30 years is well within the capability of a standard DeLorean flux capacitor.

So ocean or archipelago; the answer may be tied up in how social obligation colors this 30-year sea change. Before diving into the how and the why, though, it’s worth spending a few words on the what.

Ocean

Ocean

What is an energy ocean? Arriving at an energy ocean requires dramatic change to be sure, but most of the fundamental pieces of today’s energy ecosystem remain. Transmission exists. Its role involves bi-directional interstate energy delivery with service offerings delineated by capacity and quality. A consumer of transmission services buys, say, two terawatts of peak transmission capacity per month with five “9”s of reliability at a much higher price than if they were buying 150 gigawatts of off-peak transmission capacity at three “9”s of reliability. This consumer of transmission capacity may be pulling or pushing energy through this transmission pipe.

Distribution exists as well, with a similar role in the energy ecosystem as transmission but covering smaller capacities and more regional geographies; megawatt and kilowatt capacities spanning cities and neighborhoods with similar service level agreements for reliability.

Centralized generation continues to participate in the ecosystem, utilizing transmission and distribution to deliver product into markets that lack the resources for distributed generation. Yet centralized generation lives right alongside distributed generation, competing for customers on price and quality, each winning business when and where its service and economics are more favorable.

Finally, energy consumers remain in the ecosystem, but their energy bills are decoupled. Line items appear for the kilowatt-hours of off-site energy consumed but also for the distribution and/or transmission infrastructure used along the way for delivery to the service address when consuming as well as when generating and delivering energy offsite, beyond the meter. What’s more, a single service address may have multiple meters provided by different energy companies measuring different businesses in which a single service address is participating. Even more fundamentally, however, all these ecosystem pieces are connected. The grid remains.

Archipelago

Archipelago

On the other hand, what is an energy archipelago? An energy archipelago looks very different from an energy ocean, even though both involve water. Connectedness is gone. Each service address is an island that generates all of its energy needs locally. No transmission or distribution or centralized generation exists and in fact, the grid is no more.

In some regions where there is a dearth of locally available fuels like sunshine, wind or geothermal, there will be alternative fuels. Natural gas and hydrogen delivered via pipeline and used in high-efficiency fuel cells are examples; other examples will emerge to fill this gap as well.

The consumer’s conception of energy changes radically as well. Instead of an ongoing energy service measured in kilowatt-hours, energy morphs into just another appliance like a refrigerator or a furnace. It’s an expensive appliance for sure, so it may be financed when purchased new or rolled into a mortgage when buying an existing home or office, but it comes with a manufacturer’s warranty and will eventually be owned outright.

The service address becomes a dispatch location for maintenance services, just like the appliance provider down the road that services dishwashers and repairs ice makers. In fact your energy storage appliance will have a magnetic sticker on it that unabashedly promotes “Jake’s Energy Appliances” as the last provider to have serviced the appliance, which you call with your smartphone because you have no land-line. Since energy is generated and consumed locally, summertime brownouts and widespread outages caused by hurricanes become stories told to grandchildren as evidence of the much harder life endured by the story teller when they were a child. The grid morphs into thousands of microgrids, then into millions of nanogrids and then the meters disappear altogether, leaving just enough on-site energy generation and storage to meet each site’s demand.

Social Obligation

Energy ocean or archipelago: which eventuality we experience depends on the path taken, of course. The road to an energy ocean is evolutionary. A meaningful number of Investor Owned Utilities (IOU) and municipal utilities make the hard decisions early regarding existing business models. Via their net metering infrastructures they begin providing pricing signals that encourage rather than punish long-term connection to the electrical grid. Distributed generation is rewarded with favorable pricing while utilities carve out revenue from other services involved in maintaining the reliability of the grid and delivering centralized generation into underserved markets with favorable economics. These hard yet critical decisions keep utility companies and the electrical grid relevant long term.

The battle line is drawn at the meter. If utilities are not so proactive and continue to send pricing signals that encourage investment behind the meter, they will be locked out long term. Utilities have no control behind the meter beyond meter-based pricing signals so penalizing distributed generation and storage in order to preserve existing business models necessarily drives innovation behind the meter. Technology and financing creativity flourishes. Meeting residential and commercial energy needs onsite with economical generation and storage becomes commonplace and the grid becomes irrelevant because residential and business owners are forced to take control and hedge against the future risk of skyrocketing energy prices.

Social

Social obligation plays into this story in at least two ways: the stranded utility customers who cannot invest behind their meter are left shouldering an unfair proportion of the utility’s profitability burden while the billions of large financial institution dollars tied up in utility bonds evaporate. Can market dynamics be allowed to dispassionately select the most efficient and economical solutions regardless of the social cost? Probably not.

There will be carnage, just like there was throughout the 30 years following the breakup of the Bell Operating Companies. Many and possibly even most of the utilities we know today will disappear. Large financial institutions will lose hundreds of millions and possibly even billions in capital tied up in stranded utility sector investments. Energy customers who cannot invest behind their meter will suffer much higher energy costs for a time. In the end the societal cost of a complete failure on either of these fronts is too high. Help will be provided. The grid will not disappear entirely. A steady state will be re-achieved that is mostly archipelago, but a fluid ocean like grid will persist in areas where there are fundamental limits to 100% onsite generation and storage. This grid will be funded and managed differently – no PUC but instead, public-private ventures will dominate the financing and ownership structures require for these large societal investments.

So the answer to ocean or archipelago is… yes.